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Build the aggregate planning schedule for your factory for the next six months and to determine the best option.

Scenario
In the Module Overview, we stated that an “aggregate plan will include the quantity and timing of production for the intermediate future (typically 3-18 months ahead).” Some factors such as demand, pay rate, and the ability to use overtime or subcontract some of the production must be taken into consideration to keep the total cost of production as low as possible.
You have been asked to build the aggregate planning schedule for your factory for the next six months and to determine the best option.
This chart provides the variables and cost for each variable.
Variables Cost
Inventory carrying cost $7 per unit per month Subcontracting cost $25 per unit Average pay rate $12 per hour (8 hours per day) Overtime pay rate $18 per hour (above 8 hours per day) Labor-hours needed to produce one unit 1.5 hours per unit Units per day produced 50 Beginning inventory 0 Planned ending inventory 0 Lost sales per unit $30

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